Commercial due diligence of an oil transhipment terminal

Background

• The client sought to acquire a controlling stake in a company operating an oil transhipment terminal. Drewry was appointed to undertake a comprehensive commercial due diligence of the target asset and worked closely with the appointed financial advisors to support the valuation and acquisition process.

   

Client Objectives

• Analysis of the global seaborne crude oil trade market, including the development of long-term (2024–50) forecasts for global crude oil exports and trade volumes.

• Assessment of the crude oil exports and transhipment market in the target country, resulting in long-term (2024–50) projections of crude oil exports and transhipment volumes.

• Evaluation of the company’s competitive position, operational sustainability, key risks, and ability to maintain long-term business performance.

• Analysis of the target company’s historical and projected transhipment volumes and tariff levels, including variance analysis and identification of key demand and pricing drivers.

• Desktop review of the company’s expansion plans, supplemented by management interviews and Q&A sessions to validate strategic assumptions and development prospects.

Approach and Outcome

• Conducted an in-depth assessment of oil field developments, crude oil exports and import trends in the target country, and the competitive landscape, including the potential impact of neighbouring terminals.
• Provided an independent projection of oil trade, tariffs and revenue, along with long-term traffic forecasts for the target terminal through 2050, based on global renowned organisations’ forecasts of oil production in relevant countries.
• Drewry developed three forecast scenarios to assess the potential performance of different oil traffic segments under varying market conditions.
• Drewry red-flagged the risks for the future business development of the target terminal.